AT&T steps away from the phone booth

The ubiquity of the cell phone has finally prompted AT&T to pull out of the pay-phone business, the company announced on Monday. By the end of 2008, AT&T says, it will have exited the business completely.

The nation's No. 1 wireless-network operator, AT&T says it expects independent operators to pick up service contracts on its pay phones, which, over the past 10 years, have shrunk in number to about 1 million nationwide from 2.6 million.

For some local operators, AT&T's exit could be good news because, in a few cities, at least, pay phones still generate revenue--though not necessarily from calls. As noted in a New York Times article published in August, New York's still-abundant pay-phone kiosks generate considerable cash from advertising, and the city gets a hefty share of it.

Since 2001, pay-phone revenues from ads have exceeded revenues from calls, of which the city gets a 10 percent cut. The city gets a bigger cut--26 percent--of the ad money. Last year, the article noted, the city took in $13.7 million of the $62 million in annual revenue from ads posted on the kiosks.